Chegg (CHGG) versus ATA (ATAI) Financial Analysis

Chegg (NYSE:CHGG) and ATA (NASDAQ:ATAI) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Chegg and ATA, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chegg 0 4 6 1 2.73
ATA 0 0 0 0 N/A

Chegg presently has a consensus target price of $27.13, indicating a potential downside of 16.18%. Given Chegg’s higher probable upside, equities analysts clearly believe Chegg is more favorable than ATA.

Volatility and Risk

Chegg has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, ATA has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500.

Institutional & Insider Ownership

99.6% of Chegg shares are owned by institutional investors. Comparatively, 4.0% of ATA shares are owned by institutional investors. 10.8% of Chegg shares are owned by insiders. Comparatively, 52.9% of ATA shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Chegg and ATA’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chegg $255.07 million 14.58 -$20.28 million ($0.09) -359.56
ATA $48.63 million 0.49 $8.30 million N/A N/A

ATA has lower revenue, but higher earnings than Chegg.

Profitability

This table compares Chegg and ATA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chegg -5.55% 1.75% 1.15%
ATA 276.50% -27.69% -19.45%

Summary

Chegg beats ATA on 8 of the 12 factors compared between the two stocks.

About Chegg

Chegg, Inc. operates direct-to-student learning platform that supports students on their journey from high school to college and into their career with tools designed to help them pass their test, pass their class, and save money on required materials. The company offers Chegg Services, which include digital products and services; and required materials that comprise its print textbooks and eTextbooks. Its digital products and services include Chegg Study, which helps students master challenging concepts on their own; Chegg Writing that enables automatically generate sources in the required formats, when students need to cite their sources in written work; Chegg Tutors that allow students find human help on its learning platform through a network of live tutors; Chegg Math, an adaptive math technology and developer of the math application; Brand Partnership, which offers various ways for student-relevant brands to reach and engage high school and college students; Test Prep that provides students with an online adaptive test preparation services; and internships services. The company rents and sells print textbooks and eTextbooks; and offers supplemental materials and textbook buyback services. The company has a strategic alliance with Ingram Content Group. Chegg, Inc. was founded in 2003 and is headquartered in Santa Clara, California.

About ATA

ATA Inc., through its subsidiaries, provides computer-based testing services in the People's Republic of China. The company offers services for the creation and delivery of computer-based tests utilizing its test delivery platform and proprietary testing technologies that are used for professional licensure and certification tests in various industries, including IT services, banking, teaching, and insurance; and administrative services, such as test registration, scheduling, fee collection, and certification fulfillment. Its e-testing platform integrates various aspects of the test delivery process for computer-based tests, from test form compilation to test scoring and results analysis. The company also offers mobile test administration platform MTS for test administration; and EzTest, an online self-service testing platform that provides testing management and delivery functions for the test delivery organizations and individuals, including item banking, test form composition, test delivery, online proctoring, and test result analysis. In addition, it provides EzInterview, an online interview management platform to support the talent assessment and hiring process; and HR Select, an employee assessment solution that enables corporate human resources departments to test, benchmark, and analyze job applicants; and online education services. As of December 31, 2017, the company operated 3,344 authorized test centers. It serves professional associations, governmental agencies, and IT vendors, as well as individual online education services consumers. ATA Inc. was founded in 1999 and is headquartered in Beijing, the People's Republic of China.

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